Sponsored by state and local government employers, 457(b) Plans help employees build retirement savings and reduce taxes.

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Employers such as state and local governments (including counties, cities, municipalities, villages and townships) may adopt governmental 457 Plans. Other government employers such as transit authorities, public utilities, public schools and universities may also establish a 457(b) Plan for their employees. Certain private-sector, tax-exempt employers and executives and government officials may be eligible for a 457 Plan, which differs from the 457(b) Plan discussed above.

AdvantagesBecause of recent legislative changes, 457(b) Plans are more attractive than ever. They provide for pretax salary deferrals and tax-deferred growth on these deferrals until withdrawal, at which time they are taxed at ordinary income rates.

Eligible plan participants attaining age 50 by Dec. 31 of the calendar year may make additional catch-up contributions up to $5,500*.

WithdrawalsTo receive a distribution from a 457(b) Plan, employees must reach the age of 70½ during the current calendar year or have a triggering event such as death, severance from employment (including retirement) or an unforeseen emergency.

Unlike 401(k) Plans, distributions from 457(b) Plans are not subject to the 10 percent premature distribution tax when distribution is made before age 59½.

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Securities offered through MWA Financial Services Inc., a wholly owned subsidiary of Modern Woodmen of America, 1701 1st Avenue, Rock Island, IL 61201, 309-558-3100. Member: FINRA, SIPC. Products are available in most states. Individual representatives may not be licensed to sell all products.

*These amounts are subject to indexing by the Internal Revenue Service and may increase in the future.